A spate of takeover talk and an appetite for mining shares have helped to push leading shares to a new five month high.

With commodity prices climbing as the dollar weakened, and a positive note on the mining sector from Morgan Stanley, Anglo American added 110.5p to £27.52 and Xstrata rose 46.5p to 1286.5p. Kazakhmys, where chairman Vladimir Kim sold £840m worth of shares this week, climbed 56p to £14.83.

Among the mid caps ITV was 2.3p better at 61.55p with Nomura said to have traded 31m shares. Dealers pointed out that share volumes in the broadcaster had been far higher than average over the past five days, suggesting possible stakebuilding.

Renewed bid speculation pushed serviced office group Regus up 4.45p to 84.7p and Rentokil Initial 0.7p higher to 103.7p. JP Morgan Cazenove reacted to talk of a possible 150p a share offer from German cleaning firm CWS-Boco by saying:

CWS-Boco is smaller than Rentokil. However, it may be that CWS would only be interested in Rentokil's textile and washroom business and could do a break up bid in conjunction with other companies. A takeover bid may be welcomed by investors given that the shares have underperformed the UK market by 16% this year and it has a valuation towards the lower end of the sector. Management incentives may also offer some support for a bid. The chairman and chief executive, who joined in 2008, receive the bulk of their share options if the share price reaches between 120p and 280p and given weak trading this year and a poor share price performance a break-up could be a way of reaching this. The decline in sterling in recent years may also make sterling assets attractive for a euro bidder.

Overall, the market continued its recent good run amid hopes that central bankers - especially in the UK and US - would follow Japan's lead and approve measures to stimulate their economies. The Bank of England is due to release its comments on interest rates and quantitative easing tomorrow, following its regular monthly meeting.

But some of the shine was taken off shares by disappointing US jobs data. The ADP employer services report showed US private employers had cut 39,000 jobs in September, compared to forecasts of a rise of around 24,000. Economists said the figures did not bode well for the widely watched non-farm payroll numbers due on Friday.

In the end the FTSE 100 rose 45.63 points to 5681.39, its best level since April 26. Angus Campbell, head of sales, Capital Spreads, said:

The markets have been boosted today by the prospect of further governmental stimulus to prop up the economies and bolster growth. With the likelihood of more money printing ever increasing equity markets are rejoicing at the prospect of new capital being pumped into the system. Just as the past rounds of quantitative easing have pulled us from the depths of the worst recession in many decades, it is expected that any austerity and cuts in government spending will not cause us to dip back into negative growth.
Risk assets benefited the most from the continued confidence in equities as mining stocks soared. The bulls have seriously got the 2010 highs set in their sights now and it may not be long before we see the market back at the levels achieved in April when we saw the correction to the downside.

Airlines were in demand again, with British Airways up 11.5p to 266.1p following this week's positive traffic figures and an increase in its target price from 320p to 350p by Barclays Capital. Easyjet was 46.4p higher at 433.3p after it said it expected to beat profit forecasts.

Elsewhere Enquest, the oil and gas producer, added 7.4p to 125.6p as the company said it had a warchest of $1bn for acquisitions.

But a profit warning from software group Autonomy which saw its shares plunge 301p to £15.51 also hit chipmaker Arm, down 10.7p to 389.3p.

Telecity, the data-centre operator, fell 12.1p to 486p following news that US rival Equinix had cut its third quarter and full year revenue outlook. But analysts said the issues at Equinix would not necessarily be replicated at Telecity, although the problems at the US group probably removed it as a potential predator for its UK peer. Analysts at RBC Capital Markets said:

Telecity's principal publicly traded peer, Equinix, pre-announced a revenue shortfall that we believe derives from factors unique to Equinix's business in the US and/or its recent acquisition of Switch & Data. On a broader level, the Equinix guidance revision relates to another company-specific factor, namely internal monitoring and controls, budgeting, and forecasting practices that somehow missed the impact of customer credits on third quarter revenues and misjudged the sales pipeline conversion to revenues.
Because Telecity's 100% European business derives, in our view, a greater portion of its business from customers that place a premium on peering and connectivity, we think that investor concerns over Equinix and re-pricing practices in the US should not reflect on Telecity's business. Hence, we would view pressure on Telecity's shares related to Equinix's pre-announcement as unrelated to fundamentals in Telecity's Europe-centric co-location business.